Economists say that even if the Fed does not act after its two-day meeting, which closes Wednesday, it will send a clear message that it is standing by to do so if needed.

Economic policymakers are meeting at a time of growing urgency in Europe with Greece locked in power-sharing talks and the continent's next potential trouble spot, Spain, facing an increasingly slippery path to recovery.

While there was some relief outside of Greece that conservatives won national elections over the weekend, the results were inconclusive and the potential for more trouble in Athens has roiled markets for two days.

Both the conservatives and the third-placed Socialist party have pledged to honor Greece's commitments for further austerity and reforms agreed to as conditions for two massive international bailouts. However, they are pressing for an extension of at least two years in the deadline, and the situation in Spain seems to grow worse by the day.

Spain paid sharply higher interest rates in a short-term bill auction Tuesday, suggesting doubts about the country's ability to stand on its own financially.

There were mixed economic signals out of the U.S. Tuesday.

U.S. builders requested the most permits to build homes and apartments than they have in three and a half years and started work on more single-family homes in May.

The Commerce Department also reported that April was much better for housing starts than first thought. The government revised up the figures to 744,000 ' the fastest building pace since October 2008.

At the same time, the fourth-quarter earnings report from FedEx painted a picture of a start-and-stop recovery.

The world's second-largest package delivery company posted thinner profits and its outlook for the first quarter and the full year sent company shares down 2 percent before the market opened.

FedEx Corp. serves as a barometer for broader business trends. However, part of the carrier's outlook is based on higher costs for salaries and pensions.